What are Payment Protection Protection Insurance?

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Without further delay we will describe the main characteristics of this type of insurance:

Financial institutions are recommending to contract

Financial institutions are recommending to contract

Currently, financial institutions are recommending to contract, apart from the typical life insurance and the mandatory home insurance, a new insurance called Payment Protection Insurance.

This insurance will pay a part or the total of the mortgage payment during a certain time in the event that the mortgage holders are unemployed and / or have a temporary disability.

This product, which I did not advise before due to the improbability of being unemployed, is now more than advisable, although it is not much less cheap.

We will briefly discuss the characteristics of these insurances (based on the insurance policies of Cardif Assurances and Genworth Financial):


Insurable customers:
Indefinite employees (more than 6 months old).
Fixed discontinuous workers during the effective work period.

Loss of work due to reasons beyond the control of the worker

Loss of work due to reasons beyond the control of the worker

Most relevant exclusions:
Dismissal (when the employer dismisses someone for the existence of various causes such as prolonged absenteeism, ill-treatment of other staff, or being under the influence of alcohol or drugs during the workday).

Dismissals without the right to unemployment (very important to take it into account, if you have not quoted enough to be entitled to unemployment insurance does not pay the mortgage fees).

Resignation, termination of the employment contract by decision of the employee or for not passing the trial period.

Therefore, unemployment insurance can only be contracted for those fixed for more than 6 months; Temporary workers do not have access to it.

Temporary disability

Temporary disability

Insurable customers:
Self-employed, indefinite and temporary employees (more than 6 months old) and civil servants.
Fixed discontinuous workers during the effective work period (with Genworth).

Insurable risk:
Situation derived from both illness and accident, which incapacitates the worker to perform his usual functions, due to medical leave ruled by a Social Security doctor.

Note that does not include maternity leave.

Unemployment insurance coverage – Temporary Disability:
The insurance is responsible for a monthly mortgage payment (or the percentage contracted) for every 30 days that the insured remains unemployed and / or Temporary Disability.
The maximum compensation limits are:
12 consecutive months (mortgage payment by insurance) or 36 alternate.

Insurance cost:
Premiums can be periodic (each month the insurance passes a receipt) or a single premium (bankable on the same mortgage). Insurance can be made for a term of 5 or 8 years.

The cost depends on several factors, the insurer that is contracted, the period of validity of the mortgage, the insured capital, the percentage of the quota that covers the insurance or the age of the contracting parties.

To get an idea, a single premium for a mortgage about € 220,000 to 35 years for a 30-year-old girl is about € 3,000. With a coverage period of 5 years.

That is, if the woman is unemployed, for example, the insurance will pay her monthly fees until she finds work again with a maximum of 12 months.

In short, a very interesting insurance for the times. Too bad that the unemployment only covers the undefined.